What can be covered within the €400 limit?

Sport and physical activity, therapeutic and remedial massage, mental health, health insurance contributions, eyewear and contact lenses, dentistry (partially), additional health check-ups, vaccination, ergonomic work equipment.

What CANNOT be covered within the €400 limit?

Cash transfers to the employee, alcohol and tobacco products, mass-market food supplements, cosmetic procedures without medical indication, expenses for family members, trainer invoices without supporting documentation.

TT24 › Health benefit

€400 tax-free health benefit for every employee.

Under the Income Tax Act, every employer in Estonia may spend up to €400 per employee per year on health-promoting activities with no fringe-benefit tax.
Many employers do not make full use of this provision.

Calculator

Discover your tax-free headroom

Number of employees

Annual OH cost per employee, euros Default €120 (€10 per month). Detailed calculation

Total tax-free budget

4 000 €

per year

Mandatory OH cost

1 200 €

statutory obligation

Unused headroom

2 800 €

per year for benefits

You have €2,800 of unused tax-free headroom. That is roughly the value of sport, mental-health, or preventive activities you could offer employees at no additional tax cost.

This calculation is indicative. The precise OH cost depends on the risk level of the working environment and the pricing structure of your service provider. Detailed OH cost calculator

What this is

€400 tax-free health benefit

Under § 48 of the Income Tax Act, an employer may spend up to €400 per employee per year on health-promoting activities without that expenditure being treated as a fringe benefit.

The limit applies to each employee individually. For a company with 20 employees the total is up to €8,000 per year.

Fringe-benefit tax comprises income tax and social tax. It is a substantial extra cost that would otherwise be added on top of the spend. Every euro spent within the tax-free limit saves the employer that combined tax.

The limit applies in addition to the mandatory costs arising from the Occupational Health and Safety Act (TTOS). Risk assessments, mandatory health check-ups, and the occupational health service contract are ordinary business expenses. They do not count against the €400.

What can be covered

Six categories of eligible expenditure

01 / SportSport and physical activity

Gym, swimming pool, and fitness club memberships
Corporate sports passes (Stebby, Sportlyzer, and others)
Group training sessions and personal trainer fees
Sports competition entry fees
Sports equipment bought as a batch (partially)

02 / HealthHealth and prevention

Additional health check-ups beyond mandatory OH scope
Therapeutic and remedial massage
Physiotherapy and rehabilitation
Vaccination (influenza, tick-borne encephalitis, hepatitis)
Blood tests and health screenings

03 / Mental healthMental health

Psychologist and psychiatrist consultations
Employee assistance programmes (EAP)
Stress management training
Mental health platforms (Neomind, Mindspa)

04 / WorkplaceEyewear and workplace health

Corrective spectacles for display screen equipment users
Contact lenses where medically indicated
Ergonomic work equipment (chairs, desks)
Optician consultations

05 / DentalDentistry (partial)

Preventive dental check-ups
Dental cleaning and prophylaxis
Basic dental treatment (fillings)
Cosmetic dentistry does not qualify

06 / InsuranceHealth insurance

Supplementary health insurance premiums (LHV, Compensa)
Travel health insurance for business trips
Personal accident insurance
Specific occupational accident cover

What cannot be covered

These costs do not qualify

Expenditure that is treated as a fringe benefit or does not qualify at all.

Cash transfers to the employee. There must be an invoice for a service, not money in the employee's pocket.
Alcohol and tobacco products in any form.
Mass-market food supplements. Pharmacy vitamins, dietary supplements.
Cosmetic procedures without medical indication. Beauty clinic services.
Expenses for family members. The employee only, not a spouse or children.
Trainer invoices without supporting documentation.
Payments to an employee's personal account without a service invoice.

How to do it correctly

Four steps

Written health-promotion policy

Draw up an internal company document describing which costs you cover and which you do not. The conditions must be equal for all employees. If one employee systematically receives more than another, the Tax and Customs Board (Maksu- ja Tolliamet) may treat the excess as a fringe benefit.

Original invoices addressed to the company

Every expense must be documented by an invoice from the service provider. The invoice recipient is the company, not the employee. Where possible, arrange for the service provider to invoice the company directly.

Per-employee expenditure tracking

Maintain a register showing expenditure separately for each employee during the year. The €400 limit is per employee, not per company. Any unused balance for one employee does not carry over to another.

Separate accounting code

It is advisable to use a dedicated account in your bookkeeping, for example "Health promotion expenditure". This makes it easier to monitor the limit and to separate it from fringe benefits in declarations. Consult your accountant on the specific approach.

Summary by e-mail

Receive the €400 rule summary by e-mail

We will send you a concise summary immediately: what may and may not be covered within the €400 limit, and how to document expenditure correctly.

Frequently asked questions

Details

Does mandatory occupational health service count against the €400?

No. Mandatory occupational health services, health check-ups, and risk assessments are a statutory employer obligation under TTOS § 13. They are ordinary business expenses and do not count against the €400 limit. The €400 limit applies to additional benefits (sport, rehabilitation, mental health, eyewear).

Is the €400 limit per employee or per employer?

Per employee. For a company with 20 employees the total is up to €8,000 per year. Any unused balance does not carry over to the next year or to another employee.

What happens if I exceed the €400 limit?

The excess is treated as a fringe benefit. Tax is not charged on the first €400; it applies only to the amount above the limit. Example: if you spend €500 on one employee, €400 remains tax-free and €100 is subject to fringe-benefit tax.

How should I document expenditure correctly?

You must have a written health-promotion policy (available to all employees on equal terms), original invoices, and a register of expenditure per employee. If you systematically spend more on one employee than another, the Tax and Customs Board (Maksu- ja Tolliamet) may treat the excess as a fringe benefit.

Does the €400 limit apply to remote workers?

Yes. The limit applies to every salaried employee regardless of work arrangement (remote, hybrid, or office-based). The same rules apply: documented expenditure, equal conditions for all employees, original invoices.

Where is the €400 limit set out in law?

In the fringe-benefit provisions of § 48 of the Income Tax Act (State Gazette (Riigi Teataja)). Practical application is explained in guidance materials published by the Tax and Customs Board (Maksu- ja Tolliamet). For borderline cases, consult an accountant or tax adviser.